“Which? and the Daily Telegraph comment on the continuing post-crisis stock market rally, fuelling speculation that investors have a returned appetite for risk as they seek to outperform weak Government and Corporate Bond yields. Surrenda-link highlights TEPs as a serious alternative that investors should consider”
Whilst many of us may be baffled on the recent resurgence of the FTSE 100, Which? and the Daily Telegraph highlight a simple, yet very plausible explanation for why we are experiencing this phenomenon.
Which? reports, “Despite wider economic gloom, the stock market has soared in recent years and the FTSE 100 index this week climbed above 6,800 points – the highest it has been since the heady days of September 2000, before the dotcom bubble spectacularly burst.”
The article associates this recently experienced phenomenon with Pension Funds and Institutional Investors increasingly turning to equities in search of yield beyond those achievable on Government and Corporate Bonds. A recent article in the Daily Telegraph echoes this sentiment:
Alec Taylor of SL Investment Management, of which Surrenda-Link is the Endowment trading arm said, “On paper, current dividend yields for many of the FTSE 100 constituents remain relatively attractive when compared to returns investors are generating from gilt and corporate bond positions. However, with only tentative signs of a return to a sustained period of economic growth, investors should consider carefully whether the risk premium is sufficient to warrant a jump into equities… especially should increased inflationary concerns cause upward pressure on risk free rates in the near future.”
Taylor continues, “TEPs provide a good alternative to direct investment into equities and bonds. They provide a high degree of capital protection, whilst giving investors good upside potential should capital markets continue on their recent upward course. SL Investment Management has witnessed a recent resurgence of interest in UK TEPs from investors looking for a good balance of risk and reward in their investments. Whilst some policy holders will inevitability need to dispose of their endowment policy, there are still many investors that continue to recognise the unique attributes of this asset”.
For more information about selling your endowment policy, please contact us on 0800 919 021.